Tuesday, December 31, 2019

Lower Low and Rebound

U.S. Debt Clock: $23.17 Trillion; prev $23.16
ES Daily Candle: Lower High, Lower Low, Higher Close: Yin-Yang Candle
Market Posture: Neutral
Daily Swing Line: Neutral
Daily Bias: Up (Settle Above 18-day SMA)
Resistance: Upper Daily Bollinger Band

ES futures made a lower low - which could be counted as a fifth non-overlapping wave downward, then whipped around for the remainder of the session. The turn-around was not at all surprising as the "first new trading day of the month" occurs in the next cash session, and it is likely the inflows from the 401k's, pension funds, quarterly and year-end company bonuses, dividend reinvestment plans, etc. will lift the market.

ES Futures - 4 Hr - Some Kind of Wave ((4))

Today's initial lower prices did what they needed to do to get the Elliott Wave Oscillator below the zero line and in position for a ((4))th wave. So, looking at the possible inflows ahead, it is entirely possible the ((4))th wave is over at this time. And it depends how the downward wave is counted. (There is one way to count it that suggests the down wave is a truncated double-zigzag.)

There are ways for a fourth wave to extend. This latest upward wave could be part of a b wave, but if it goes over the top, that seems like it would be less likely. Between now and January 2, one might want to keep an eye on the overnight markets.

Have an excellent end to the prior decade!
TraderJoe

3 comments:

  1. Looks like 4 is done. VIX in fairly precipitous decline characteristic of a bullish reversal. It seems the end-of-year inflows you cited are right on time. I think we head up to around 3260 to complete a fifth, with another "Frenetic Friday" just ahead. Perhaps this time we see that VIX upside gap (at end of wave five) that has been elusive so far.
    Happy 2020 everyone!

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